Your Self-Worth is Not Your Net Worth | Audrey Bellis | Ep 215

In Today's Episode

Audrey Bellis

  • @AudreyBellis on all social media handles
  • Audrey's Email: hello @ audreybellis.com

What You'll Get Out Of Today's Show

  • It's a difficult time for the country and the world right now. But Audrey Bellis, our second in our case study series, is making the most out of a difficult situation with the pandemic.
  • With the new work-from-home norm, she has mapped out a way to save $2,600 a month in rent and childcare by moving 45 minutes away from Downtown LA to her parents' neighborhood.
  • That's not her only FI win. She also learned that HUCA can save you a lot of money in fees, interests, and subscription costs. What is HUCA? Hang up and call again! Audrey kept trying different customer service representatives for her banks and service providers until she found someone who would help her out.

Resources Mentioned In Today's Conversation

If You Want To Support ChooseFI:

Transcript Here

 

Speaker 1:
You're listening to ChooseFI Radio. The blueprint for financial independence lives here. If you're looking to unlock the secrets to financial independence, and early retirement, you're in the right place. Stay tuned and join a community of like-minded people who are getting off the hamster wheel and taking control of their lives in the pursuit of financial independence. ChooseFI, your home for financial independence online.

Jonathan:
Hello everybody. Very excited to hop back into our case study series and recognize that this community the financial independence community encompasses everybody. They may not realize it yet, they may not have had that epiphany that financial independence is something worth pursuing, but everybody wants this, and people from all walks of life are pursuing this. But we have to recognize that people are doing this from different stages in their walk of life. And they're having to do this with various obstacles that they've been handed.

Jonathan:
Today, we're speaking with Audrey. And Audrey is a single mom, she's working in tech, she lives in a high cost of living area. And specifically, during this pandemic, she's not able to collect or receive child support. It's a trying time. Having said that, what she's been able to accomplish up to this point is truly incredible inspirational. And we are honored to get the opportunity to kind of dive into our numbers, pull out some of those actionable tips and help her paint a picture for what her path to financial independence might look like. To help me with this, I have my cohost Brad here with me today. How you doing, buddy?

Brad:
Hey, Jonathan, I'm doing quite well. And yeah, I'm really excited about this case study series. And Audrey's story has a little bit of everything. Like you said, she's in a high cost of living area. She's trying to figure out how to budget and plan as a single mom and managing that obviously on a single income. And her story goes into being your own advocate, how to take charge and open up opportunities, and also to get over financial shame and consider true resilience in the face of true hardship. So really, really excited to go through this, I think there's going to be a lot of actionable takeaways for the audience. And with that, Audrey, welcome to ChooseFI.

Audrey:
Thank you guys so much for having me. I'm excited to be here.

Jonathan:
Well, it's going to be a lot of fun. I wanted to spend some time on your story as a first generational Latina, a multi-time founder, single mom. There's a lot of incredible stuff in your background here, and I want to tie that to your money story because you're doing so much right. I mean, give us some context here for when you realized, all right, I'm the one that has to do this and here are the tools that I have available. It's really incredible what you've accomplished. Where does this begin?

Audrey:
A loaded story, right? It's like when somebody says, hey, how are you doing? You're like, oh my gosh, I don't even know where to start.

Jonathan:
Guilty, bad question.

Audrey:
That's okay.

Brad:
Tell us more.

Jonathan:
Once upon a time.

Audrey:
What I will do is I will actually backtrack maybe about eight years and tell you how I got into tech and how that led me to where I am today. So, roughly about eight years ago in my early 20s, I had a broken engagement that really left me in a position of feeling like I was broken financially, emotionally, and I really looked for ways to pick myself up.

Audrey:
And as a result of that relationship, I actually became self-employed and I started my first eCommerce business, which transitioned from there into saying, hey, I'm looking for a community to work with. I started to help build the first coworking space in downtown Los Angeles at the time, Indie Desk, and then I got very involved in the community. I helped other people build coworking spaces. I worked with Mayor Garcetti's office with my startup StartUp DTLA which helped bring tech and creative companies downtown as a way to build community and bridge people to resources, especially bootstrap startups that perhaps didn't have a lot of capital.

Audrey:
And then from there, I started a series called Worthy Women that was very specific for women of color, because I would go to these events and look around and say, hey, nobody here looks like me. Despite the blonde hair now, which I didn't have then, the audience was fairly white, and I didn't have a lot of women of color. There weren't a lot of black and brown female founders. And I said, well, I know you're out there because I'm out here. Where are you? And more importantly, how do we get you visibility?

Audrey:
So I started a series that spun off from StartUp DTLA called Worthy Women that really focused on a core tenet that helped me come out of financial crisis, and it's my personal mantra and it's you cannot raise your net worth until you raise your self-worth. I am affirm believer that the relationship that you have with money is a direct reflection of the relationship that you have with yourself. Are you stuck in scarcity and do you want to create abundance for yourself? That doesn't just come with oh, I put it on my wish board or I manifested it and it came to the table today. I don't know about you but money doesn't drop out of air for me. It is hard work, but more importantly, it's a mindset that helps you create actionable behaviors that help drive the outcome of what you're trying to do.

Audrey:
And so, through that, I had a great experience meeting tons of women like myself, but one of the things I heard quite a bit from them was, this is wonderful, but how do I bring this into my workplace? So I transitioned Worthy Women to be a program that did diversity and inclusion and sales and leadership for enterprise companies, which when I was pregnant was great for consulting, it allowed me a lot of flexibility. I had a very difficult pregnancy. So it allowed me the flexibility to both work from home, work remotely, travel on site when I needed to, which was incredible. And then after my son was born, I really enjoyed doing that but I needed something a little bit more that had me feeling like myself. New mom, I was used to hustle and bustle, now I've got a child stuck to my boob half the time.

Audrey:
And a very, very realization that for somebody who has never felt like my opportunities were limited, I mean, I always feel like I could just do anything as long as I have an internet connection and a motivation to, you can figure it out. I became very aware that my opportunities were directly tied to how much childcare I had and how much I could afford. I had a partner who was not present, non-existent and not contributing financially. And so things were not pretty at home. I knew that I needed out of this situation, and more importantly, I needed something different.

Audrey:
At the beginning of this year, I took an incredible position in-house with one of the best funded SaaS companies in Southern California called ServiceTitan. And I'm a sales enablement manager, and I get to do the thing that I love the most, helping empower sales teams and helping empower leaders to be empathetic and driven to their core values and create outcomes that are in alignment with their purpose and their passion. So, that is a very through-line to have gotten me here.

Audrey:
But I'll tell you, another reason that I'm here is, I look back and I say, I did so much work over the last eight years. How did I come back to a position where I've left a relationship or said like, get the heck out. And I feel the same way. I feel like my finances had been violated and now I'm rebuilding yet again. And the realization that financial independence, while it is something that I have built and have, it also ebbs and flows with circumstances beyond your control and I'm a type a person that wants to control everything. And it's really taught me a lot about patience, releasing, recognizing that things happen to you but you don't have to be a victim of those circumstances and that it's okay to start over.

Brad:
Wow, that is incredible. I want to just for a quick second, go back to your early 20s. You described, eight years ago, broken engagement and you said you felt broken. You started the first coworking space in Los Angeles, you worked with the mayor's office. You did these incredible things for this Worthy Women, for women of color. So many people have imposter syndrome, so many people are afraid to get started. And I'm curious if you could go back to the mindset of Audrey in her early 20s who felt broken, but yet did these incredible things. How did you get off the couch and do that? Where did you find that within yourself?

Audrey:
I don't have to go back eight years, I'm still there. I don't think you ever lose that. Back then, the determination was, I'm not going to let this define me. I felt that I did the right things. And sometimes you can do all the right things and it's still not going to be the outcome that you desired. And I learned back then that it was because I had attachments to what I felt those outcomes had to look like. I was forcing them to fit into a box instead of allowing fluidity.

Audrey:
Today, I look around and I say, I did everything right and I'm in this position, I'm a single mom, it's pulling teeth to get child support, literally the day that he was removed from my home, I said, "Are you going to at least share the cost of child care so I can work?" And he said, "FU." And I said, "Okay, you don't care whether you have a roof over your kid's head, if your kid has groceries, if he's okay. You just want to pretend like you live this incredible life, fronting on my money," because when I met him he wore Michael Kors from TJ Maxx. When I kicked him out, he was wearing Louis Vuitton, Ferragamo and Gucci and not things that he bought. Those were things on my credit because he didn't have credit. He needed me to cosign for him.

Audrey:
And so I sit here and I say, I did everything right. I feel like I'm in this position where that's been violated. And you asked, how do you get off the couch and do it? Because I'm not going to let somebody make a victim out of me. I have a kid, and I'm going to tell you a story of how I got this job. And this should tell you a lot about me. The day he was removed from my house and the police came was the day I had my first interview over the phone. And I did so good. And I remember telling the police, "This cannot take more than an hour because I have a phone interview with a new job. I need this to go well." And in tears. I composed myself, locked myself into the closet. And I did that interview so well, they called me back the next day and said, "Audrey, we'd like to book you for a second phone interview."

Brad:
That's amazing.

Audrey:
The day of my second phone interview was the day I was granted a temporary restraining order. About an hour before that, I was puking in a court hallway. And the day of my in-person interview with a 12 person hiring panel, I had gone to court on the restraining order the day before. The restraining order wasn't granted permanently. The judge said my son had to stay with him overnight since he hadn't seen him in some time. And I had spent the entire night awake sobbing on the floor sniffing my son's clothes like he had died because this person has my son who has never spent any time with him, doesn't care about his well being, doesn't even financially provide for him, yet I'm supposed to hand my child over. Thanks, California Courts. And I got through that interview so well, I got the job.

Audrey:
And I remember when I started my first day, I told my hiring manager that, and she said, "If that's what you look like on a bad day, I don't know what you look like on a good day, Audrey". You just do. You have To learn to compartmentalize. And I think that really ties back to our financial journeys and the shame of something happened to me, I don't want people to know. I have to be able to compartmentalize and say, is this a thing that has happened to me or is it something I'm holding on to? And secondly, is this something that I can address and do something about or is this something that is beyond my control and I need to focus on what is in my control because wasting time and energy on things that are beyond my control, they don't serve me, they bring down the energy of what I am trying to do and they are a distraction.

Audrey:
And that's easier said than done. There are days where you will find me in the corner crying, eating ice cream and just wishing the day would end, counting down the minutes to bedtime. But I think more days than not, when I can focus on asking myself the questions of is this within my control and is it not, and focus on the things I do have control over, it helps me build confidence, and it helps remind me in small, incremental ways that all those things tie into a much bigger picture.

Jonathan:
So Audrey, actually, there was something you said in there that I just can't, it's still sitting with me right now, and you used the word mantra so I'm just going to put this back on you, what was that internal mantra that you used for yourself personally to help you get through this and also now it's something you take with you into these consults that you do? I believe you were talking about your net worth versus your self-worth. Just share that with our audience again.

Audrey:
Yeah. So the line is, you cannot raise your net worth until you raise your self-worth. And we joke that that's like an Audrey-ism because people always associate me with that line now.

Jonathan:
No, I think that's the title of the episode for sure. But aside from that, when did that become your internal mantra and how did that manifest in the choices that you made early on choices? Now, you look back at all these steps that you've taken and who you are has become clear to you as defined by the choices and the actions that you took. But when you first started having this language in your mind, what did the first flexing of that idea look like?

Audrey:
So, I like to think of it as bridging small right actions. So, roughly eight years ago, I was paying off a significant amount of debt. That relationship had affected my credit score significantly. And filing for bankruptcy wasn't an option. Actually, maybe it could have been an option, but I think I morally and just from my own shame standpoint, wasn't willing to accept that, I was going to find a way out of this.

Audrey:
And so, for me, I said, how did I get into this situation? And I made financial choices based on external worth, right? So I thought if you had the things, if we had all the material stuff, then that was reflective of the condition of where we were, and that wasn't accurate. So, I then associated with, if that is my perspective, thank you therapy, of how I view money and attach self-worth, why am I not looking for that internally and recognizing that everything I need I already have.

Audrey:
And so, that became the foundation for the mantra, but the behavior behind escalating out of that and transitioning my life really started with, again, these bridging small right actions. So I looked at the debt and I said, okay, what is the first thing that I can pay off? And where can I start to cut something out of my life or my budget, that I could say, okay, here's a small amount that I'm going to contribute.

Audrey:
And every day or every week, or whatever the cadence was at the time, I'm going to focus on contribution that helps reduce a number. And I became obsessive with tracking it in spreadsheets. I tracked every dollar, every interest, fluctuations. I got really, really aggressive with negotiating. I started calling all my bills, what could I reduce the amounts of, how could I lower my interest rate, what type of programs did they have that I could opt into. And then I became very obsessed with my credit score. What is one item that I could move on my credit score or adjust and improve and then I could see the whole thing increase or become more net positive.

Audrey:
And as a result, those tiny small actions bridge together consistently over time yielded large results. I was able to pay off close to, at the time, it was a six figure debt in like 18 months. I became obsessed with it. And it also created momentum. If I did a little, then I gained confidence that I could do just a little bit more and I could push myself a little bit more. And all those things really helped me build over this decade. And so, even though I'm in a position now that has been personally very challenging and even seen some financial challenges, I can lean on the fact that I have a great credit score because I'm obsessed with it and I'm fiercely protective of it.

Audrey:
When it comes to my spending, yes, are things tight? Yeah, I'm a single mom. When you're sitting there and somebody's telling you FU because they don't want to help pay for their own child that they begged for, you sit there and you go, okay, I can't rely on you for anything. Or when they try to pay, they're constantly in arrears and trying to catch up, I can't rely on that. I can't tell my kids, sorry, I can't feed you today, I'm going to have to feed you in a month. Sorry, I can't buy you new shoes. Sorry, I can't pay for daycare, I'm going to have to pay for daycare in a month or 60 days from now because it's just not convenient for my budget. It doesn't work that way.

Audrey:
So for me, yes, it is tight because I can't rely on that second amount coming in on a consistent basis, but I can focus on the things that are in control and that's my earning potential, how I manage the money. So for me, it comes down to where's it being spent, when is it being spent, am I anticipating it? And what's scarier is what happens with the unknown like this pandemic?

Brad:
Audrey, you're obviously talking about a sense of agency and this internal locus of control. And I want to go back to that time where, we say here, everything is negotiable. You took charge of that, you were relentless with these different bills and lowering interest rates. Talk us through, were there any particular takeaways that you could pass along to the audience, one little actionable nugget that you can remember, this amazing win that you're especially proud of? Does anything stick out in your mind?

Audrey:
I think you just need to pick up the phone. And this actually happened to me a couple of weeks ago during COVID. So, my Capital One card, I have one of the Quicksilver rewards cards, it's great for travel and cashback, but it still has a pretty high interest rate. I've been a customer over the years, I just pay it off every single month as I use it, so, I didn't need to worry about the interest, it wasn't affecting me. During COVID, though, we had some uncertainty and obviously transitioning into kind of the single mom life. I had two months where I wasn't able to pay it off in full and I was carrying about $1,000 balance.

Audrey:
And then next thing you know, you're getting hit with the interest and you're like, oh, maybe it's not a ton this month but that's the difference between groceries and not. So I called and I waited on hold for a long time and I spoke to somebody and I asked what my options were. And they said, "Have you been affected by COVID?" And I said, "Who hasn't been affected by COVID?" And they said, "Well, that's not really a reason to not pay your bill. We don't really have any options for you." And I got off the phone and I felt a little bit defeated. I happened to mention it to a good girlfriend of mine and she said, "No, no, no, no, no call back. What is this Audrey that's just giving up. I don't know this Audrey. What are you doing here?" I said, "You're right."

Audrey:
So I picked up the phone, I called back and I got somebody else and I said, "Hey look, I'm a single mom. I don't know what's going to happen. I absolutely have been affected by COVID. I have not received the funds that I was expecting to from my son's father, and he has been dramatically affected by COVID. He's a public speaker and does a lot of conferences. And as you can imagine, every single conference has been wiped out and he is reframing his position. I don't know if I'm going to be getting any money from him. And maybe he's not even being a jerk in this moment because this is actual real life. This has affected him in a way where now he really doesn't have a choice. And fighting with him is just worthless, like there's no point to it."

Audrey:
And so, the representative I spoke to you happened to be a single mom, and she said, "You know, honey, I've been there. I know what that looks like." She said, "How about this, I can reduce your payment to zero for this month. Would that help you?" I said, "It would, but you know what would helpe me more is the interest rate. What can you do for me on the interest rate?" And she said, "Well, you know what, you have 37 months of perfect history with us. Here's what I can do for you. I can lower that interest rate from like," I don't know, the standard was 23% or 24%. She said, "I can lower that to about 8% for you, but it's variable." She said, "Based on your credit score, so it'll adjust as the market adjusts. Would that help you this month?" I said, "That would, but that's just for this month. What if this goes on month after month?" She said, "Okay, you get a zero payment for this month, and I can lock in the credit or the interest rate for the rest of the year." And I said, "Done."

Audrey:
She said, "If it persists, call back next month." And guess what I did, because the interest rate was lower and I had a zero payment, I sent in a significantly larger payment. I paid down my balance, and that helped me tremendously. That was in March. I call back in April. She was able again to lower my payment to zero. And even better, when I called back, it wasn't the same rep, it was a different Rep. I said "Hey, by any chance do I qualify for a line of credit increase? That card had a $5,000 line of credit." They said, "You know what you do, you do." And they upped it to 7500, which also helped my credit score because now my debt to income ratio was improved. So, I was able to pay off debt. But again, you got to call, and I waited on hold for over an hour, but I was not going to get off the phone without getting something out of it. Even if it's small, it makes a difference.

Jonathan:
Yeah, and you said something earlier, and you can adjust this if I missed it slightly, but don't let your current circumstances define who you are as a person or where you're going. And I think that's the heart of this. And this is kind of where we are, this is current times. It's great to talk about how we just conquered all in the past and look at us and how great we are. Life punches you in the face and a lot of people, it's punched them in the face right now in a way that people haven't appreciated for over a decade. And here you are with everything that's going on, clearly that doesn't define you. I think anybody can objectively look at where you're headed and saying, wow. But we're at Ground Zero right now. And I'd love to actually kind of pivot here and talk a little about your financial game plan. What's coming up for you?

Jonathan:
We took some notes ahead of time in terms of your cost of living, but maybe we could just kind of for our audience frame your budget right now and what your goals are for your income and your expenses.

Audrey:
So, right now the budget is tight. If you cannot rely on child support, then I need to make sure that I can cover every single expense. And so, every single penny is accounted for. I track it in a spreadsheet that I revisit daily, but there isn't a lot of wiggle room. So when big things come up, it's a little scary. My son is going through a major growth spurt, I need to buy a new car seat. And I didn't realize I needed a new car seat because we haven't been driving for the past 10 weeks because we've been in quarantine. But the other day we went to Chick-fil-A through the drive thru because he loves Chick-fil-A. And I was like, ooh, this car seat's real tight. We're going to need to do something about this.

Audrey:
Well, car seats are expensive. I've committed to the Nuna brand because I like it because it integrates with my strollers, which is not the most inexpensive. But if I'm going to get him the next one that he needs, I'm going to say it's like 500 or 600 bucks, and I'm like, I don't have an additional 500 or 600 bucks in my month to month budget. Do I open a credit card at Nordstrom to get it? Do I compromise what I feel is a lesser quality car seat that's cheaper and now feel like I'm scared to have my son in the car because I couldn't afford the car seat that I wanted?

Audrey:
Those are things that I have to justify and make some choices around. And the reality is, is I'm probably going to put the car seat that I want and make the choice that I want to spend a little more and get something that I feel has the better safety rating. But I'm going to have to put it on my credit card and pay it off over two or three months instead of just being able to allocate that because having liquid cash is essential.

Audrey:
I see my friends that are getting laid off left and right and I'm terrified. So I myself I'm trying to conserve cash wherever I can and not make unnecessary expenses. And that is scary. That is a very scary place to be in, especially when you're trying to sit here like I'm in the abundance, money comes to me, money flows to me, I'm grateful I can pay my bills. And I am truly grateful, every single time I pay bills, hit the ground with your knees and just be thankful to be able to pay it. But it is scary. And it's hard not to go to that place.

Jonathan:
So Brad, $500 car seat, is that where we should start? Did that one get teed up for us? I don't know.

Brad:
Yeah, yeah, Audrey definitely served that up on a silver platter. Obviously, let's start with, just like we always say here at ChooseFI, you spend money on what you value. There's no judgment, there's no you need to do X, Y and Z to be a card carrying member of the financial independence community. That is total BS nonsense. That's not how we roll. But yeah, obviously I was dying a little bit inside when I heard a $500 or $600 car seat.

Jonathan:
I think we got all of ours from a buy nothing group. We did buy the first one, was it Graco, we did get our first one new, it was a Graco.

Brad:
That's funny, that's the exact one, yeah, it was Graco SnugRider. I remember, I actually googled it right now because my oldest daughter is almost 12 so it's been a while. But yeah, we bought this book Laura found called Baby Bargains: The Secret to Saving 20 to 50% on Baby Furniture Gear, etc. And it looks like this book still exists. And kind of how we approach purchases are, there's always the crazy expensive things that in our eyes are usually not any better, maybe marginally better at best, but people are paying for like a brand name. So like, Laura and I throw those out immediately. And then we look for that sweet spot.

Jonathan:
Does your car seat have Bluetooth because you probably should make sure it has that feature, this is 2020.

Brad:
Do not have Bluetooth. Clearly safety was the key. We looked for the best safe car seat in the sub $150 range. And yeah, it's interesting, Jonathan, that both of you and I hit on that Graco SnugRider. But again, Audrey, this is not a, no shame at all.

Jonathan:
I mean, I'm pretty sure our audience, if we didn't bring this up, would just say, all right, I'm done.

Brad:
I can never listen to ChooseFI if they let that slide. I think that's interesting because it's purchases in general. I know my wife, Laura, she has a smoothie every morning, and her blender just broke. It's interesting how you can approach a purchase. You can say, Jonathan, what's that crazy blender that you love?

Jonathan:
Oh, I do love the Vitamix.

Brad:
Vitamix.

Audrey:
I have one.

Jonathan:
Yeah, that's good. Brad, you got [inaudible 00:27:33] I'm guessing. You have to replace it every year but you could go through 20 of them before you catch up to a Vitamix.

Brad:
Yeah, that was kind of our thought was like, we have a $30 blender, and again, this is totally personal opinion. It's just like how I approach a purchase versus Jonathan, in this case, the blender and maybe Audrey. A Vitamix is going to cost you about $300, $400 plus.

Jonathan:
You say that, Amazon was doing a refurbished deal on Vitamix blenders. I got one for my mom, $150 refurbished, keep your eyes out, best Mother's Day gift ever she said.

Brad:
That is very, very interesting. But yeah, so that was our kind of analysis. And now obviously, this is not safety with a car seat with a car seat clearly. But our $30 Hamilton Beach blender, even if literally, Jonathan, if it lasted a year, we could go 15 years replacing this every single year for the one cost of one Vitamix.

Jonathan:
But Brad, think of the environment. Look at all the waste. You've just put 30 blenders into the environment, man. Audrey and me, we're just watching out for the, we buy once and then it works.

Brad:
But no, obviously, I don't expect it to break every year. But anyway, just an interesting concept on how to approach purchases.

Jonathan:
I do think generally the anchoring yourself and realizing, all right, why do we need the best and most expensive of anything. I think those are the appropriate reasons, it's not as likely to break, the safety is higher. There's something to be said out there, it's a concept that we talked about in the past episode, it wasn't our concept, a guest brought it to us. The marginal utility of a fork. A fork has basically one directive, one objective. It takes the piece of food off your plate and puts it in your mouth, and you could get a plastic fork, or spork. You could get a metal or stainless steel utensil for dollars, 50 cents, 20 cents at a thrift store. Or you could spend hundreds of dollars on the set, you could get gold enameled fork for 10s of thousands of dollars. At the end of the day, it takes the food off your plate and puts it in the mouth.

Jonathan:
So once we figure out what is that marginal utility of anything, we want to make sure that achieves our objectives, in your case, safety is paramount. So, we look at the top 10 car seats that provide a level of safety and we say, okay, how do we optimize this? I'm not going to put my kid inside of a booster seat, a little plastic booster seat and just throw it in the car. Is there a way that we can have something that's safe but doesn't cost five times as much as the other great safe budget option. That's just kind of the way we think, but I think that actually sets us up really well just to talk about like, this is a very, I get that, which is why I hesitate to say this, car seat and safety are very emotion, and it's very emotional purchase. You're doing this with the utmost of good intentions, safety of my child, safety of my child. There's nothing more important.

Jonathan:
What does it look like though if we take that same idea value and apply that to all of our regular purchases that we're actually making? Have we optimized everything? If we're saying, all right, our car seat is unquestionable. We have a $500 budget, we're going to put that on the credit card, we're going to make the payments. Well, the problem is, if that's the same logic we don't bend anywhere, then we can afford the payments, keeps us in a paycheck to paycheck state for life. And we need to break that again because our current circumstances don't define where we're going. And you have to be willing to change something.

Jonathan:
So I think as we look through some of the other line items in your budget, it might be interesting just to see is there margin here. It's great to say we can just earn more and great, do it. But as you know, as an entrepreneur, money doesn't fall out of trees, you got to turn it on. You have to lean into it and that could be a multi-week, multi-month, multi-year process for that to actually work. So great, make more is like this inevitable future circumstance. It's going to happen, but right now, we could spend less now. We can do that now, but only if we know what we're actually spending, where's that going, then we apply some sort of value calculation to where our funds are actually going.

Jonathan:
So, Audrey, I know I just monologued myself for a little bit there. Is this a fun thought experiment? Would you be willing to do this with us?

Audrey:
Oh, absolutely. We all fall victim to the frivolous purchase that I want it because when I looked at the car seats, I chose [crosstalk 00:31:40]. I got to come back to it for a second. When I looked at the Nuna brand, yes, probably a portion of me was highly influenced by the number of moms with the Nuna brand. Moms on my social media, moms in my mom group, moms of my friends circle that highly, highly recommended it for its beautiful design and all the other things that come with it. Safety, critical, right? It's one of the top car seats on the market, but also, longevity.

Audrey:
So, to your point with the example of the blender, the Vitamix, I could buy it once, but it has a phenomenal warranty program and it has a servicing program for parts and replacement. The Nuna as long as it hasn't been in an accident also comes with an excellent warranty. And this one because now he's older, converts to multi-phases so it's supposed to last him until he's actually in a booster seat. So, I look at that or I look at some of the cheaper car seats that perhaps I would need two or three in between now and the booster seat. You're looking for that, you try to find a balance, but I agree, but I'm sure there are things in my budget that are just frivolous. Like I am admittedly addicted to Amazon. I love Amazon. I abuse that Prime membership. If I can get it on Amazon versus anywhere else, I say delivery to the point that I am known as the highest volume package receiver in my building.

Jonathan:
Yeah. If only they would just turn on the drone service and you could just have it floated in in between your lunch breaks, that'd be great. Cool.

Brad:
Don't tempt her, Jonathan.

Jonathan:
Yeah, I know, I was waiting for it. I am going to leave the car seat alone. I feel like there's no way for me to win this one on this one but I appreciate the conversation and people of good faith can disagree on certain items. Brad, why don't we go ahead and look through just, as we were looking at your budget, Audrey, it looks like your core expenses right now come to around, in order for you to keep the lights on, pay your bills, it's around $6300 to $6500 a month. Is that accurate?

Audrey:
Correct.

Jonathan:
And what comprises that? Is that rent, groceries, bills, car payments? Is that the brunt of what makes up that? Is there anything else?

Audrey:
I own my car free and clear, which is very nice, so I don't have a car payment, and it was purchased cash. Rent is roughly three grand a month because I live in LA, and in particular downtown, so it's a high cost of rent. That's actually something I'm negotiating right now. My lease ends in July and due to COVID, many people have not paid their rent, which puts the property manager in a position where one, thanks to our local, actually, I think this might be national now, that they can't raise your rent, I've been able to be in a position where I can negotiate not having a rent increase. And if the rental market is being hit, how can I lower my cost of living if I decide to renew or way moving to an area outside of LA close to my job still that might have a lower cost of living currently. An entire paycheck goes to my rent, that is high.

Audrey:
And at the time that wasn't so bad when I was sharing that cost with somebody else, but when that person's suddenly not there and you're still in the lease and you are legally obligated to it, it's a little more difficult. So, that's a big chunk.

Audrey:
Childcare is the other. When you're spending two grand just on daycare, not counting if you need additional nanny help for pickup or drop off so that I can work the hours that I need to work, that adds up very quickly. By comparison, my parents who live about 35, 45 minutes outside of LA, cost of childcare is one third of the cost of daycare in downtown Los Angeles, without a waitlist. So, those are other things that I'm weighing and looking at right now, but childcare and my rent are very high.

Jonathan:
Yeah. And I will say anecdotally just to your point about rent, rent is softening already. As you see, the price increases aren't coming in. Landlords fearful of the tailwind that comes when jobs disappear in mass like they have now are eager to lock in one year leases. I know anecdotally in our Facebook group, which is pretty active, individuals have said they've been able to proactively go into their landlords and renew their one year lease right now. Landlords are hopping on it, even at reduced rent prices just to have that security of the lease option from a renter that they know can pay. So, you would expect to see more and more of that in the future and you're definitely thinking about that the right way.

Jonathan:
Very interesting about the arbitrage situation there. LA, very high cost of living, you clearly have a job there, you probably aren't eager to embrace the 45 minute commute to shave off some cost of childcare. One thing that came to mind is with what's going on, remote working is growing in popularity and probably will be even more of a factor. On the other end of this, you're working with a SaaS, the tech company. Is there any flexibility there? Do you see any of your commitment to have to go into the office and have that commute? Do you see any of that shifting on the other end of this?

Audrey:
I hope so. So they haven't announced when we will come back to work yet. We have some rough idea of when phases of the office will begin to reopen, but I don't think my division or my team will be essential to be on site. And so, I've seen other companies, obviously, we all saw that Twitter allowed permanent work from home basis. I have been in touch with my leadership and my HR business partner to let them know that if that comes up, I would exercise that option because then I could move closer to my parents for extra added support and help.

Audrey:
I also would be able to lower my cost of living significantly both in rent and maybe even put me in position for my long term goal, which is to buy, especially if the market corrects itself and these phenomenal interest rates that we're seeing, I mean, that could be a life changing opportunity for me. I hate to sound like slightly excited during a global pandemic, but if I have to look at where can I see some positive, the opportunity to have that flexibility while still doing work that I love and having the opportunity to do it from home, or even just come into the office one or two days a week, that would be incredible.

Audrey:
And I don't know yet, those things haven't been finalized, obviously, because the company is still evaluating and making what it feels will be the best decision. But if that becomes an option, I certainly would exercise it and find an opportunity to save money. And let me tell you how much I could save because I already budgeted this out. I could save $1,000 on rent and have a larger home, not an apartment in a high rise, but a house. And I could save a significant amount on child care. In total, it adds up to something like $2600 a month in my pocket I could save if I get work from home status and I can move closer to my parents.

Brad:
So that's 30,000 plus dollars a year after taxes in savings.

Audrey:
That's home buying.

Brad:
So home buying, is that an express goal, like is that an American Dream type thing? For me, even though I am a homeowner, I am not in that kind of cult of homeownership thing. If you can get your rent down under $2,000 a month, and that seems incredible, it's like you said, especially getting out of high rise and into a house, do you have a sense of what the homes you're looking at would cost you monthly and what that would do to you financially?

Audrey:
Yeah. So I would be looking at roughly 1800 to $2,000 for a small midsize two bedroom house near my parents. It's outside of LA, it's halfway between LA and Orange County, essentially. And so, that puts me closer to job markets, including the one that I'm in if I continue to stay with an employer versus maybe in the future if I ever wanted to work for myself again full time, then I would still be close to those markets. But I think of home buying as putting down roots.

Audrey:
My parents have only ever had two houses, the one that I grew up in that they lived in for 32 years and the home that they bought when they retired, which is a beautiful property in a private Canyon. It's gorgeous, it's the home of their dreams. And I think of home buying as the stability I want to offer my son. My ex-partner moved around quite a bit. I think he went to something like more than 15 schools when he was growing up. And that's not the experience I want for my son. I think of it as stability and I also think of it as a financial vehicle that will perform for him, even if it doesn't perform in my lifetime.

Audrey:
The reality is is that LA real estate, even in a suburb is always going to go up. And maybe I'll spend 30 years paying that mortgage. Is that something that I leave to him that he can take on and not have that same financial burden or sell and see profits from and reinvest? Or is there an opportunity to grow that stability so that I can perhaps maybe reinvest in the future and either buy rental properties or use it as some other vehicle towards a different goal later. I think of it as setting aside money for myself versus pissing it away to somebody else that they can have that stability.

Jonathan:
Yeah. So if you look at your expenses, I mean, we talk about this as the big three, really, if you want to add taxes, then the big four, and in LA, taxes would be a big four. But taxes, and then you have your shelter which we just discussed, you have your transportation paid off car by the way, nice job, looks great with a Nuna car seat. And then number three would be your food. And we could spend a little bit of time there, I'm just curious like, I would imagine with the COVID and the pandemic, probably dining out, eating out less as part of corporate work lunches, that's probably shrunk down a little bit. What's happened to your grocery budget over the last couple months?

Audrey:
Actually, it's increased. So, my company actually provides lunch for us. So, now, I am actually buying more groceries. The other part of that is I am guilty that I did just a little bit of pandemic buying because I got very concerned seeing all the empty shelves and I have a child that needs to eat. And he is a big eater. He's two but he can pack away food. And people always tell me, oh, just wait till he's older, he's going to eat you out of the fridge in his teenage years. And so, having fresh food on a regular basis are things that he needs. I can't have him stocked up on dry food or non-perishables that perhaps aren't as healthy for him.

Jonathan:
Do you have any sense of what your grocery budget looks like right now in terms of how much is being spent on food and dining out, that sort of thing?

Audrey:
Yeah, I'd probably say about 500 bucks a month.

Jonathan:
Okay.

Brad:
That's not terrible for two, certainly.

Jonathan:
Stock up on those dried beans and rice. I got a little worried when I was going to the grocery store when it was all hitting and I was like, you know, maybe I'll just get a bag of beans and just have that aside just in case. And then they were all gone, I was like, wait a second, did I miss my shot, have I missed my card to the apocalypse? Like, oh boy. But anyways, we're good now.

Jonathan:
I want to go ahead and move down. So we worked through the big three, and then we got the line items in our budget that would normally make it up. And then we got what I tend to look at because these are the ones that kind of get left by the side that they add up slowly, the subscription services. You work for a SaaS, they offer a great service, but that's probably one of many that people have. And between your cell phone package, your cable package, your a la carte streaming services, do you have them all or have you made a selection?

Audrey:
I've made a selection and I'm sure like many other people, I actually share some of my selections. So for example, my parents have the Netflix account that has four profiles, and I have one, my sister has one and they have theirs. But I pay for the YouTube TV, and YouTube TV offers you, I want to say like five or six spots, something like that, and my parents are on my YouTube TV. So that kind of balances each other out. Amazon Prime as I've stated, I love and use quite a bit. I don't have Hulu. I find that between Amazon, Netflix and YouTube TV, I've got a very robust offering of shows that honestly I really don't watch that much.

Jonathan:
What about your internet and your phone? How much are those costing you?

Audrey:
Internet is 30 bucks a month, which also thanks to COVID I called and told them that the competitor was marketing in our building and they had a great promo offer and I might be considering switching. And they were very willing to match it and give me a $50 postpaid credit to thank me. I know. So I haven't paid internet for two months, I'm very grateful for that. But roughly, that's $32 a month. And cell phone, I'm with T-Mobile, and I have my phone and a tablet on it. But even looking at ways that I can cut that down.

Jonathan:
You know how much that bill is?

Audrey:
It's about $127 a month.

Jonathan:
Man, Brad, I feel like this is the one that people just pass right on by. 120 bucks a month, that's par for the course.

Brad:
I personally have been using Republic Wireless for the last 10 or so years. And I think we spent somewhere, it's sub $20, I think I wound up pre-paying for a year and it went up coming up to 18 or $19 a month, which is pretty amazing. What we generally say at ChooseFI is, to get in a better financial position, you have to take action. And sometimes, there are tiny, tiny little sacrifices.

Brad:
Let's use this as an example. So, what my wife and I said was we could have the $100 per month cell phone and have unlimited data. We could go stream YouTube videos and download podcasts when we were in the doctor's office or out of the grocery store. But we could get something like Republic wireless. There are obviously options but that's the one that we really like quite a bit. And it gets us one gigabyte of data a month.

Brad:
So now that's not going to be enough clearly to stream YouTube when you're out on the fly. But the tiny, tiny, tiny little sacrifice we were willing to make to save $100 each per month, which is $2400 per year after taxes for us was all right, we get unlimited Wi-Fi. So we'll just download our podcasts when we're in the house. Not a big sacrifice. We won't stream YouTube or watch Netflix when we're not in the house. Not a huge sacrifice. Is it a tiny sacrifice? Yes, it is.

Brad:
But in order to get into a better financial position, you have to be willing to make tiny little sacrifices. So, to me, that was an absolute no brainer. And like I said, we've been saving a couple grand as a family for the last 10 years. When you talk about compounded over a decade, that is a huge savings.

Jonathan:
And to our audience, if you feel like you were paying way too much for your cell phone and not getting nearly enough service for what you're supposed to be getting, go check out Republic Wireless. For more information, go to republicwireless.com/choosefi. One word, republicwireless.com/choosefi.

Jonathan:
But, kind of to tie in this whole thing together for you without going a while lot into investment strategy, which we've covered in the past, but just kind of mapping out from where we are now to like an endgame here, you have this core expense structure roughly of $6500 a month. And I know that life costs more than that with additional things, but your cost of keeping the lights on. But we said during the pandemic, some things have changed. And potentially, you're strategizing a few other things to create a space of maybe even as much as another thousand to $2,000 a month. So let's just assume your life costs more than $6500 a month now, but with some structural changes, you're able to kind of create a floor, comfortable life around 6500 to $7,000 a month.

Jonathan:
The way that we typically map out this idea of financial independence. So how much do I need to have in my investment accounts before, in my mind, I don't need to work for money again, not to say you don't work, not to say you don't earn money, but like you have created a perpetual money making machine, an investment machine that can produce enough income for you to last the rest of your life, probably with some leftover for your heirs.

Jonathan:
The way you would do that is you take your monthly expenses, which for the sake of this example, let's just say that's $6500 a month. You multiply that times 12 to get an annual amount, which I believe would be about 78,000, then take that amount and multiply it times 25, which says that your number, your financial independence number would be about $1,950,000. When you're at $2 million in your investment accounts, again, we've talked about what the allocation would look like in prior videos, you would basically be at a point where if you never earned another dollar again, you'd be able to fund your current lifestyle, your current existence for perpetuity, or certainly for the rest of your natural life.

Jonathan:
What's interesting about this is we haven't really looked at the income side of things, but between your main job and your side hustles, you actually have a pretty significant amount of space there, especially in light of the fact that you might be able to reduce your expenses. And just to show you that the small things matter, we talked about how there's ways that you could potentially trim hundreds of dollars, thousands of dollars a month. Every $100 a month and recurring expenses that you can cut from your budget is $30,000 less that you need to reach this point of financial independence.

Jonathan:
And imagine how your life changes when your employer needs you more than you need them. When you're no longer motivated by how am I going to keep the lights on, what am I going to do next week, what choices, what do you lean into, what projects do you take on? You really start looking at all these things you're pursuing and saying, what is bringing the most joy to my life? This is where I want to spend the next chapter. And the money isn't necessarily the primary motivating factor at this point. It's not that we ignore it, it's not that we hate money. It's just that, oh, wow, if I never earned another dollar, I'd be good to go.

Jonathan:
And I'm just curious, as you come out of this, out of COVID, out of everything that's going on, what is next steps for you? What do you find yourself wanting to accomplish or to tackle?

Audrey:
I love the number of reducing your expenses by 30% because I'll tell you what, during COVID, myself and many other people, we're all faced with, I can't get my eyelashes done, I can't get my eyebrows done. I really, really need to get my hair done. I can't get a manicure, I can't get a pedicure. And guess what, we all managed to figure it out ourselves. I pulled out those tweezers. And when you think of those expenses, arguably, I think I saved like $1,000 in the last seven, eight weeks of personal grooming that I chose not to do because you couldn't get it. And I managed just fine. I look the same. In fact, I'm blonder, I look better.

Brad:
Excuse me, Audrey. That is $500 a month which you save just in beauty and grooming. According to Jonathan, that $30,000 that you need less in your ultimate net worth for every $100 per month, and you're talking 500, just that one decision is $150,000 less than you need to save in your working career to reach financial independence just for that one decision.

Jonathan:
And this is the way we look at all recurring expenses, right? I mean, this is not about deprivation, it's about value. Your most precious non renewable resource is your time. How much power do you have when you realize, oh, wait, I'm not paycheck to paycheck. Oh, wait, I could go years without needing to earn another dime. So what projects do I lean into? This just being on this path and getting started the way you have, it takes what for other people would feel like risk. And for you, it turns it into opportunity. This is why you're, I love that, I'm going back to it, right? Your self-worth is a leading indicator of your net worth. When you take care of that and you get your fundamentals in place, the net worth is going to follow and it's going to come with so much opportunity.

Audrey:
Yeah, it really is. The way that you phrase it is a little different than how I do it but something that stands out to me is what are the things when you don't value your self-worth that you compromise your net worth for? So I think of my nails. A gel manicure and a gel pedicure in LA is close to 100 bucks, especially downtown. Get your hair done, that's roughly 50 to $60 an hour depending how many hours you're in the chair. If you're doing something with highlights or balayage and a treatment and a haircut, you're looking at a $400 hair treatment, eyebrows are 20 bucks, my eyelashes are 150. I very willingly went back to strip lashes because you just make it work and tweezers instead of somebody else finessing with some wax. And you're fine. You all live. I lived and I feel the same.

Audrey:
And to your point, have I saved time? Actually, yeah, perhaps because I also didn't have to pay child care for somebody to watch my son at 20 bucks an hour when you think of it that way. I was able to take that money and apply it towards paying off other things. My goal is to come out of quarantine debt free. That is my goal. Stop any unnecessary expenses, which thanks to what has happened, I've been forced to, so what a blessing. And I'm so grateful I'm in a position where I have the opportunity to work from home. I'm safe. And that is a privilege that I do not take for granted any day. The fact that I can work from home is such a privilege and I am so grateful for it and for a company that has supported us in working from home because our software is sold to essential workers, plumbers, electricians, HVAC.

Audrey:
I was in a Slack channel the other day and I told one of my coworkers, I have never been so grateful to work so hard in my life. So grateful. And coming out of this finding the positive and being able to apply it reminds me, like you said, going back to that place of humility of okay, something has happened beyond my control, what can I do with this? How am I going to get up from it? I look at it and I say okay, what have I learned from this and how can I apply it and where have I drifted off the path slightly, not realizing because you get comfortable, right? Oh, I can afford this, to your point, I can afford it. I can do this this month and next month and slowly over time those things add up and they snowball, and this has helped me course correct.

Jonathan:
So Audrey, someone's listening to this, they're inspired by your story, they want to connect with you. What is the best way for someone to find out more?

Audrey:
I'm @AudreyBellis on all social media handles or [email protected]

Jonathan:
Audrey, thanks so much for joining us on the show today.

Audrey:
Thank you for having me.

Jonathan:
All right, everyone, I hope you got value from this episode. The case studies have quickly become one of our favorite parts of doing this show just because you get to, I mean, not everybody's going to give you the cleanest answer, the exact answer you want and that shouldn't be that way, life isn't that way. We all are motivated by different things. We all have different things that we value, different things that we won't question, won't take for granted, and different challenges that we're going through. And that is what makes life unique to each of us. How fascinating to get an opportunity for someone to come on the show and share with us where they've been, what they've worked through, what they've learned along the way, and what they're doing about it. I think that is why financial independence is a universal concept that you may not have realized that you needed in your life till now.

Jonathan:
If you're getting value from the show, recommend this to a friend or family member. If you use particular apps that allow you to recommend this podcast and you got value, such as Overcast or Spotify, recommend it by pressing the star feature on your player of choice. It just says to other individuals that might get value, hey, this one is worth your time. We appreciate you, thank you for joining us and for subscribing. We'll see you next time as we continue to go down the road less traveled.

Speaker 1:
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1 thought on “Your Self-Worth is Not Your Net Worth | Audrey Bellis | Ep 215”

  1. Just a general comment about cell phone plans. I started with Verizon years and years ago and have chosen to stay with them for their reliable coverage. Ofcourse, I look for the best deal. I now pay only 30 a month for a Verizon prepay, no contract, unlimited talk and text and 6GB of data plan ($35 plan with $5 for auto deduction payment). Also Verizon gave 15G free data during cover that extended through May). I think this is pretty good deal and could be helpful for those who want to stay with verizon and are currently paying over $127 a m month!

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